• InSignal Trading

Fortnightly Gold Update - A Look Into 2021 - Market Breakdown

Updated: Dec 21, 2020

The price of Gold is, as we all know, heavily impacted by the stability of the world as a whole. When the world seems unstable, the price of Gold rockets, as we saw back in August when Gold hit a new record high of $2,067 Per Ounce.


Since then, the gradual increase of the worldwide economy has allowed the price of the world's most precious metal slump back to around $1900 Per Ounce, which begs the question, is it worth buying or not?


Analysts have said over and over they expect to see Gold hit the $2400 eventually, and are now as convinced as ever to see it approach that mark in 2021, and as the end of the year is creeping upon us, analysts expect the economy to slowly gather steam going into the first quarter next year, subsequently weakening the US Dollar in the process.



A full size graph of the price of gold XAUUSD
XAUUSD - Gold Full Size Chart Update - Resistance at 1800

Above we can see a very strong support/resistance level around $1800, which we believe will be the crucial level before the bullish run into 2021.


Three times throughout 2012 the price tapped this region, before making its final bearish push downward for the next 3 years, hitting a low at the $1050, which is another very high support/resistance level.


Midway through 2020, after a few months of consolidation, the price broke through the $1800 like a piece of paper and proceeded to rocket to an ATH of $2,067, before then reversing into a short term downtrend toward the prestigious $1800 region.

After a very brief touch into the golden region, the price is looking like it is going to return to the highs of 2020, but we aren't so sure, yet.



Full chart view of Gold XAUUSD
Market Breakdown Of XAUUSD - The 3 Touch Validation

We believe the above diagram to be one way the next 6 months of XAU/USD price action could go, as price very rarely hits a point and never touches again, and here we hope to see a Three Touch Validation.


As we have already achieved the first point of contact into the $1800 region in late November, we believe the next coming together will be very early in the year, which will result in a spike in price, hopefully pushing above the top trendline and forcing a retest.


As you see the third and final area along the $1800 region is labeled in green, which signifies the very last time price will touch the region for, we hope, a very long time.


After this retest of both the trendline and support and resistance area, we believe the price of the precious metal will reach the highs of $2400 so many of the top analysts believe.


But, as for all market trading, we know the outcome for this exact movement above is very slim. Price could continue its downtrend, bouncing between the 2 trend lines all the way down to $1050? Or it could keep bouncing along the $1800 region for months, teasing the breakout.


As for our XAU/USD Market Breakdowns, we will be publishing once every 2 weeks, each time reviewing our previous breakdown, picking it apart, and re-evaluating to give you the very best data for you to make an informed decision whether you want to buy or sell the famous yellow metal.


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